The residential sector accounts for around 17% of the UK’s carbon emissions in the UK, with gas boilers being responsible for the vast majority. Currently, 23 million homes are using gas boilers for their central heating and hot water. The only viable options for decarbonising home heating are those using electricity as a fuel source.

This note sets out the main options for heating homes with electricity, along with a brief outline of the advantages and disadvantages of each.

Click on the links below to explore the different options:

• Ground source heat pumps (individual)
• Air source heat pumps (air to water)
• Networked ground source heat pumps (shared ground array)
• Hybrid heat pumps
• Air-to-air heat pumps
• District heat networks
• Electric boilers
• Gas boiler: counterfactual

• Heat pumps are usually the most efficient technology for heating homes, using 3 to 4 times less energy to provide the same heat as a boiler.
• Direct electric heating options (panel heaters, storage heaters, electric boilers) are much less efficient. They can be cheap to install, but have very high running costs and impose extra stress on the grid.
• Air source heat pumps are suitable for most homes in the UK.
• Homes less suitable for air source heat pumps, such as flats in dense urban areas, can connect to district heat networks or networked ground source heat pumps as an alternative option.
• Depending on circumstances, some households could also use air-to-air heat pumps and zero emission boilers (ZEBs).
• Technologies such as solar panels and battery storage can complement electric heating to reduce running costs. Time or type of use tariffs can further decrease consumer electricity bills.
  

The UK’s housing stock is very old

• More than half of properties are over 60 years old (EHS).
• The UK has an unusually low number of flats compared to mainland Europe. 25% of English dwellings are detached houses and bungalows, 25% are semi-detached, ~30% are terraced houses and only ~20% are flats.
• The proportion of property types differ between regions. Scotland has a much higher proportion of flats than England (36%). 20% of its housing is semi-detached, 20% terraced houses and 23% detached houses.

Future prices of electricity and gas will impact incentives to electrify heating:

• The costs of running an electrical heating system will depend on electricity prices. A key metric is the price of electricity relative to gas (the price ratio) because this will determine the potential consumer benefit of switching from gas to electricity.
• Gas wholesale prices have risen by a factor of 3 to 4 over the last 15 years, with these increased costs being passed down to consumers.
• The UK Government’s Department for Energy Security and Net Zero (DESNZ) predicts that wholesale electricity prices will drop significantly between now and 2030 and then rise a little between then and 2040. Gas prices are also predicted to decrease slightly by 2030, but there is much more uncertainty, as international events impact the wholesale price of imports.
• Price components, namely the costs associated with infrastructure, might contribute to the final consumer prices of electricity and gas rising. But the government could reduce the household price of electricity relative to gas by shifting policy levies from electricity bills.
• For a typical-sized home, a heat pump currently costs about the same to run as a gas boiler, with the unit price of electricity being almost 4 times higher than the unit price of gas. If policy levies are shifted to gas, the price ratio could become as low as 2.5, which would make heat pumps by far the most affordable heating option.

Air source heat pumps use electricity to transport heat from the air outside, compress it to a higher temperature and transfer it into a home via water in radiators or underfloor heating. This process means that electricity is not being directly converted into heat, allowing efficiencies of at least 300%. This is often expressed as a COP (coefficient of performance) of 3, which means that 3 units of heat are being provided for every 1 unit of electricity used. It consists of an outdoor fan unit with an internal heat exchanger and hot water cylinder for domestic hot water provision.

Around 1% of homes (~250,000) in the UK have an air source heat pump, making them the most widely installed efficient low-carbon heating system in homes. They are suitable for most property types and are the main technology supported by the Boiler Upgrade Scheme (BUS).

A large share of this cost is often related to upgrading radiators, installing a hot water tank and replacing pipework. Replacement installations would be cheaper. Consumers using time-of-use tariffs can significantly reduce running costs, with further reductions possible for those with solar panels and/or battery storage. Disruptions from installation are typically 2 to 5 days.

Ground source heat pumps use electricity to transport heat from the ground, compress it to a higher temperature and transfer it into a home via water in radiators or underfloor heating. Heat is gathered from the ground via pipes that are laid in boreholes or trenches. They are typically even more efficient than air source heat pumps, providing 3 to 4 times the amount of heat than the electricity they use.

There are an estimated 30,000–38,000 ground source heat pumps installed in UK homes, but numbers have not been rising significantly. They are mostly suited to large homes with lots of outdoor space and are supported by the Boiler Upgrade Scheme.

The largest share of this cost is due to the required groundworks, with a significant proportion also resulting from upgrading radiators, installing a hot water tank and replacing pipework. Similar to air source heat pumps, this high cost applies to the first installation with ground arrays having life expectancies of over 50 years. Consumers can further benefit from time-of-use tariffs and coupling with solar panels and/or battery storage. Disruption from installation is typically 5+ days.

Networked ground source heat pumps provide heat to homes in the same manner as individual ground source heat pumps, transferring heat to a home via radiators or underfloor heating. However, in this case, multiple homes all make use of the same ground array. Homeowners pay a standing charge for connection to the shared array. The system consists of an indoor hot water cylinder and heat exchanger connected to a shared array that is often dug under the street.

There is not much information on how many homes are currently connected to shared ground arrays, but we consider them to be a good option for flats, denser areas and some housing estates. Shared ground loops need to be installed on a street-by-street basis, and can’t just be chosen by individual households. Not every home on the street needs to opt in, but the more homes that do opt in, the lower the costs. Properties connecting to shared ground arrays can also make use of the BUS as long as the overall system capacity is under 300kW and individual heat pumps are 45kW or less.

The cost of the heat pump itself ranges between £4,450 - £7,365, however, there is little data available on the additional cost of installation. The cost associated with installing the shared ground array is normally paid for via a standing charge on the property. The estimated install time is 2 to 3 days.

The energy bill would be very similar to a single ground source heat pump, but with an additional service charge. The size of the service charge is dependent upon the number of properties connected to the ground array, with large numbers of connections resulting in lower costs.

Hybrid heat pumps combine an air source heat pump with a traditional gas boiler. The heat pump should provide the majority of the home's heating demand, switching to the gas boiler when outdoor temperatures are very low or electricity prices are high. The system consists of an outdoor fan unit, an indoor heat exchanger and a gas boiler. If coupled with a combination boiler there is no need to install a water cylinder for domestic hot water provision.

There is little data available on the number of homes with hybrid heat pumps in the UK, but some have suggested that they could be a transitional technology for some consumers. This also means that consumers have to make a second transition, effectively paying twice to decarbonise. There is also a risk that the gas boiler is used more than intended, resulting in lower emission reductions than expected. Hybrid heat pumps are not low-carbon systems and as such, they are not eligible for the Boiler Upgrade Scheme.

Upfront costs will be lower than for a heat pump due to less need for supplementary work such as upgrading radiators, new pipework and a water cylinder. Consumers can further benefit from time-of-use tariffs and coupling with solar panels and/or battery storage (although with a worse return on investment compared to standalone heat pumps). Disruption from installation typically lasts around 2 to 5 days.

Air-to-air heat pumps also transport and compress heat from the air outside, but transfer it to a home as blown air. This negates the need for radiators or underfloor heating, as well as enabling their use for cooling. They are considered to have similar energy efficiency to air-to-water heat pumps, although there is little evidence of this in practice. They consist of a smaller outdoor fan unit with indoor units for each heating zone. They are not able to produce hot water and so require a separate technology, such as an immersion heater, alongside it.

They are often mislabelled as air conditioning in the UK and are most commonly used for commercial premises. In Scandinavian countries, they are typically used with other supplementary heat sources or to serve as a source of cooling in countries like Spain. Air-to-air heat pumps may be a good option for smaller properties and flats. Currently, they are not eligible for the Boiler Upgrade Scheme.

The cost to install a single unit to cover a single heating zone can be even lower. Some households could install air-to-air heat pumps whilst retaining their previous heating system. This means that they can be very affordable in small homes, especially studio flats, but costs rise sharply for larger homes. They should have similar efficiencies to air-to-water heat pumps, but this is not well documented in the UK. Installation disruption may be 2 to 3 days.

District heat networks deliver centrally generated heat to multiple buildings through a system of insulated pipes. Each home connected to the network typically has a small in-home unit to exchange heat with a central plant room that services multiple homes. These plant rooms are typically also able to provide domestic hot water for the homes they serve, negating the need for hot water cylinders.

Approximately 450,000 homes (~2% of homes) are connected to heat networks in the UK, with 30% of these being in London. They are most suited to high-density urban areas. Not all heat networks have a low-carbon heat source, but these can be retrofitted to make use of large heat pumps or industrial waste heat. Homes are typically added to heat networks at the point of construction or as part of a large retrofit scheme, making them a less viable retrofit option for individual homeowners. The UK Government has a specific policy for heat networks, which includes developing heat network zones, with support from the Heat Network Delivery Unit.

Households do not typically pay upfront to connect to heat networks. This cost is financed over long periods with partial costs passed down to households via standing charges. The standing charge may vary depending upon the type of housing, with social housing having reduced charges compared to private housing. The above running costs assume a standing charge of between £313-£389 per year.

Electric boilers turn electricity directly into heat that is transferred to a home via water in radiators or underfloor heating. They have efficiencies of nearly 100% and modern versions - zero-emission boilers (ZEBs) are paired with a heat battery to store heat during periods when electricity prices are lower. Some electric boilers are able to provide domestic hot water for smaller properties, but ZEBs and larger properties require a water cylinder for domestic hot water provision.

Around 7 to 8% of households in the UK have electric-only heating, approximately 2.1 million households. Direct electric heating refers to a few different technologies, such as storage heaters, electric radiators, panel heaters or underfloor heating. They are most suited to smaller properties and flats. Households with direct electric heating are more likely to be in deep fuel poverty because of the high running costs. Direct electric heating technologies are not currently eligible for the Boiler Upgrade Scheme.

Modern ZEBs cost between £8,000–£9,000 to install with potential additional costs if a hot water cylinder is required. Electric boilers have very high running costs because they are ~3 times less efficient than heat pumps and electricity is expensive. Running costs for ZEBs are significantly lower as they can utilise off-peak electricity prices. Installation disruption is around 1 to 2 days.

Gas boilers burn natural gas to heat water, which is then circulated through radiators or underfloor heating to warm the home. There are three main types of gas boilers.

Combi boilers provide heating and hot water on demand without the need for a water tank, making them suitable for smaller homes. System boilers require a hot water cylinder to store heated water. Conventional (or regular) boilers use both a hot water cylinder and a cold water tank, making them a better fit for larger homes with high water usage or older heating systems.

As natural gas is a fossil fuel, gas boilers are not compatible with net zero.